Kapnick & HPS Group File 13D on Mediaco Holding

TL;DR

**Kapnick & HPS Group now own significant stake in Mediaco Holding (MDIA). Watch this space.**

AI Summary

On April 17, 2024, Scott Kapnick and HPS Group GP, LLC filed a Schedule 13D regarding their beneficial ownership of Mediaco Holding Inc. The filing indicates a change in reporting as of April 24, 2024, with Scott Kapnick listed as a key individual associated with the filing, and HPS Group GP, LLC as a group member. The filing concerns Mediaco Holding Inc.'s Class A Common Stock.

Why It Matters

This filing signals a significant ownership stake or change in control interest by Scott Kapnick and HPS Group in Mediaco Holding Inc., potentially impacting the company's strategic direction and stock performance.

Risk Assessment

Risk Level: medium — Schedule 13D filings often indicate activist investor intentions or significant shifts in control, which can introduce volatility and strategic uncertainty for the company.

Key Players & Entities

• Mediaco Holding Inc. (company) — Subject company
• Scott Kapnick (person) — Filing person and group member
• HPS Group GP, LLC (company) — Filing person and group member
• SLF LBI Aggregator, LLC (company) — Group member
• April 17, 2024 (date) — Date of event requiring filing
• April 24, 2024 (date) — Filing as of date

FAQ

Key Financial Figures

• $0.01 — suer) Class A Common Stock, par value $0.01 per share (Title of Class of Securiti
• $60.0 million — ction, Aggregator received the Warrant; $60.0 million of newly issued shares of Series B Pref
• $30 million — ies B Preferred Stock of the Company; a $30 million second lien term loan; and approximatel
• $0.00001 — rant, at an exercise price per share of $0.00001. Subject to certain limitations, the Wa

Filing Documents

• eh240473342_13d-mdia.htm (SC 13D) — 91KB
• eh240473342_ex04.htm (EX-99.4) — 180KB
• eh240473342_ex05.htm (EX-99.5) — 117KB
• 0000950142-24-001181.txt ( ) — 390KB

Security and Issuer

Item 1. Security and Issuer. This Schedule 13D relates to the Class A Common Stock Purchase Warrant (the “Warrant”) to purchase up to 28,206,152 shares of Class A common stock, par value $0.01 per share (the “Class A Common Stock”), of MediaCo Holding Inc. (the “Company”), an Indiana corporation. The address of the principal executive offices of the Company is 395 Hudson Street, Floor 7, New York, New York 10014.

Identity and Background

Item 2. Identity and Background. (a), (f) This Schedule 13D is being filed jointly by (i) Scott Kapnick, a United States citizen, (ii) HPS Group GP, LLC, a Delaware limited liability company (“HPS Group”) and (iii) SLF LBI Aggregator, LLC, a Delaware limited liability company (“Aggregator” and, together with Scott Kapnick and HPS Group, the “Reporting Persons”). (b) The principal business address of each Reporting Person is 40 West 57th Street, 33rd Floor, New York, New York 10019. (c) Scott Kapnick is chief executive officer of HPS Investment Partners, LLC, which is a registered investment adviser and is affiliated with HPS Group (collectively with HPS Group, “HPS”). The principal business of HPS and Aggregator is to engage in making investments in public and private companies through various strategies across the capital structuring including privately negotiated senior debt; privately negotiated junior capital solutions in debt, preferred and equity formats; liquid credit including syndicated leveraged loans, collateralized loan obligations and high yield bonds; asset-based finance and real estate. (d), (e) During the last five years, none of the Reporting Persons have (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Source and Amount of Funds or Other Consideration

Item 3. Source and Amount of Funds or Other Consideration. On April 17, 2024, the Company and its wholly-owned subsidiary MediaCo Operations LLC, a Delaware limited liability company (“Purchaser”), entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Estrella Broadcasting, Inc. (“Estrella”), a Delaware corporation and subsidiary of Aggregator, and Aggregator, an affiliate of HPS Investment Partners, LLC, pursuant to which Purchaser purchased substantially all of the assets of Estrella and its subsidiaries (other than certain broadcast assets owned by Estrella and its subsidiaries (the “Estrella Broadcast Assets”)), and assumed substantially all of the liabilities of Estrella and its subsidiaries. As consideration in the transaction, Aggregator received the Warrant; $60.0 million of newly issued shares of Series B Preferred Stock of the Company; a $30 million second lien term loan; and approximately $30 million in cash for the repayment of certain indebtedness of Estrella and payment of certain Estrella transaction expenses. CUSIP No. 58450D104 SCHEDULE 13D Page 6 of 10

Purpose of Transaction

Item 4. Purpose of Transaction. The Reporting Persons have acquired the Warrant for investment purposes. The Reporting Persons intend to review their holdings in the Company on a continuing basis and, depending upon the price and availability of the Company’s securities, subsequent developments affecting the Company, the business prospects of the Company, general stock market and economic conditions, tax considerations, investment considerations and/or other factors deemed relevant, may consider increasing or decreasing their investments in the Company. Except as set forth in this Schedule 13D, none of the Reporting Persons have any plan or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. However, each of the Reporting Persons reserves the right to change its plans at any time, as it deems appropriate, in light of its ongoing evaluation of (i) its business and liquidity objectives, (ii) the Company’s financial condition, business, operations, competitive position, prospects and/or share price, (iii) industry, economic and/or securities markets conditions, (iv) alternative investment opportunities and (v) other relevant factors. Without limiting the generality of the preceding sentence, each of the Reporting Persons reserves the right (subject to any applicable restrictions under law or contracts by which it is bound) to at any time or from time to time (A) purchase or otherwise acquire additional shares of Class A Common Stock or other securities of the Company, or instruments convertible into or exercisable for any such securities (collectively, “Company Securities”), in the open market, in privately negotiated transactions or otherwise, (B) sell, transfer or otherwise dispose of Company Securities in public or private transactions, (C) acquire or write options contracts, or enter into derivatives or hedging transactions, relating to Company Securiti

Interest in Securities of the Issuer

Item 5. Interest in Securities of the Issuer. (a) Scott Kapnick is the sole member of HPS Group. HPS Group is the non-member manager of Aggregator. The responses of each Reporting Person to Items 7 through 11 of the cover pages of this Schedule 13D relating to beneficial ownership of the shares of Class A Common Stock are incorporated herein by reference. CUSIP No. 58450D104 SCHEDULE 13D Page 7 of 10 Each of the Reporting Persons disclaims beneficial (b) See Item 5(a) above. (c) Except for the transactions described herein, there have been no other transactions in the securities of the Company effected by any Reporting Person within the last 60 days. (d) No person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Class A Common Stock reported herein. Estrella has the right to receive the shares of Class A Common Stock subject to the terms of the Option Agreement (as discussed in further detail below); however, such option is not exercisable until October 17, 2024. (e) Not applicable.

Contracts, Arrangements, Understandings or Relationships

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Asset Purchase Agreement The description of the Asset Purchase Agreement under Item 3 above is incorporated by reference herein. Warrant On April 17, 2024, in connection with the transactions contemplated by the Asset Purchase Agreement (the “Transactions”), the Company issued the Warrant, which provides for the purchase of up to 28,206,152 shares of Class A Common Stock (the “Warrant Shares”), limitations, the Warrant also provides that the Warrant holder has the right to participate in distributions on Class A Common Stock on an as-exercised basis. The Warrant further provides that in no event shall the aggregate number of Warrant Shares issuable to the Warrant holder upon exercise of the Warrant exceed 19.9% of the aggregate number of shares of common stock of the Company outstanding, or the voting power of such outstanding shares of common stock, on the business day immediately preceding the issue date for such Warrant Shares, calculated in accordance with the applicable rules of the Nasdaq Capital Market, unless and until the stockholder approval of the Proposal (as defined below). Option Agreement On April 17, 2024, in connection with the Transactions, the Company and Purchaser entered into an Option Agreement (the “Option Agreement”) with Estrella, a subsidiary of Aggregator, and certain subsidiaries of Estrella pursuant to which (i) Purchaser was granted the option to purchase 100% of the equity interests of certain subsidiaries of Estrella holding the Estrella Broadcast Assets (the “Option Subsidiaries Equity”) in exchange for 7,051,538 shares of Class A Common Stock, and (ii) Estrella was granted the right to put the Option Subsidiaries Equity to Purchaser for the same co

Material to Be Filed as Exhibits

Item 7. Material to Be Filed as Exhibits. Exhibit No. Description Exhibit 1: Joint Filing Agreement Exhibit 2: Asset Purchase Agreement, dated as of April 17, 2024, among MediaCo Holding Inc., MediaCo Operations LLC, Estrella Broadcasting, Inc. and SLF LBI Aggregator, LLC (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024) Exhibit 3: Class A Common Stock Purchase Warrant issued by MediaCo Holding Inc. to SLF LBI Aggregator, LLC, dated April 17, 2024 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024) Exhibit 4: Option Agreement, dated as of April 17, 2024, among MediaCo Operations LLC, solely for purposes of Section 5(a), MediaCo Holding Inc., Estrella Broadcasting, Inc., Estrella Media, Inc. and the grantor parties thereto. Exhibit 5: Stockholders Agreement, dated as of April 17, 2024, among MediaCo Holding Inc., SLF LBI Aggregator, LLC and SG Broadcasting LLC Exhibit 6: Registration Rights Agreement, dated as of April 17, 2024, among MediaCo Holding Inc., SG Broadcasting LLC and SLF LBI Aggregator, LLC (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024) Exhibit 7: Voting and Support Agreement, dated as of April 17, 2024, among Estrella Broadcasting, Inc., MediaCo Holding Inc. and SG Broadcasting LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024) CUSIP No. 58450D104 SCHEDULE 13D Page 10 of 10 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: April 24, 2024 /s/ Scott Kapnick Scott Kapnick HPS Group GP, LLC By: /s/ Scott Kapnick Name: Scott Kapnick Title: Sole Memb

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View this SC 13D filing on SEC EDGAR